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first it's great to be back and have a voice and be healthy for once. i always like to say i promise try to find a bull market right here a "mad money." i'm jim cramer. i will see you tomorrow. now republicans face a choice, are they willing to compromise to protect vital investments in education, health care, national security, all the jobs that depend on them, or
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would they rather put hundreds of thousands of jobs in our economy at risk for a spew special interest tax loop holes. good evening, everyone. i'm larry kudlow. this is "the kudlow report." you heard it. president obama slams the republicans, predicting dire results if they don't avoid the sequester. but is this the very same president obama who said this about that same sequester less than 18 months ago? >> some in congress are trying to undo these automatic spending cuts. my message to them is simp -- no. i will veto any effort to get rid of those automatic spending cuts domestic and defense spending. there will be no easy off-ramps on this one. well, i wish he would make up his mind. remember, this was president obama's god. now he needs to blame somebody else for it. here's the thing, he should be embracing the sequester.
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why? smaller government is essential to a prosperous economy. as the mainstream media become the president's lapdog? are they just victims of president obama? even pillars of the media establishment are starting to complain about their lack of any access to the president. now, here's some good news this evening. check out the markets, dow and s&p 500 making new five-year highs, nasdaq closed at its highest point in 12 years, easy money, rising profits, and maybe smaller government are all help stocks to rally. "the kudlow report" begins right now. first up, see the president pushing the fear factor agenda, more dire warnings, our own john harwood joins us with the
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details. good evening. >> reporter: good evening, larry. today was a day of public posturing not only by the president, but the heads of the presidential commission from a couple years ago. first of all, the president tried to put pressure on them, who have complained that we need to only do spending cuts. he's saying, no, we need to do revenue as well to avoid some of those dire consequences. as for spending cuts, he said if you go along with revenue, i'm going to agree to some extending cuts. here's the president. >> i am willing to cut more spending that we don't need, get rid of programs that aren't working. i've laid out spchb -- achieve the same amount of health care -- as proposed by the bipartisan simpson bowles commission. >> the leaders of that commission said they are pushing both sides to accept higher
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taxes and democrats to is emmore spending costs especially on entitlements. >> we're going to have to push a white house on health care, push the republicans on revenue. what we have try to do do is make enough cuts in health care to slow the rate of growth on a per capita basis to the rate of growth to the economy. in our opinion, that takes about $600 billion to do over a ten-year period. >> what's getting more and more clear, larry, if there's a deal to undo the sequester, it probably will come after march 1st when the initial phases take effect, becausers can i bowles and alan simpson today said they think it will take the public backlash from effects on services like longer lines, longer waits in airports, better congress and the white house will come together to make a deal if they can make a deal. >> john, i watch your excellent
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interview this morning. you know, they stopped talking about pro-growth tax reform, either corporate tax reform or individual tax reform. they sound much more austerity driven. what's changed their minds minds, do you suppose? >> they're still for tax reform and only using part of the money for deficit reduction in part to lower rates. i think they're looking at the inability to get a deal so far and trying to put as much useful pressure as they can to get deficits down. their goal is a stronger economy for sure, but ultimately more than anything else, what they're valuing is savings and deficit reduction, and it's possible tax reform and growth could go by the wayside as a top shelf consideration for them. >> i hear you. john, thanks. we appreciate it. here's a sound bite from bowles and simpson that i'm afraid is totally wrong. take a listen. >> i think when this really stupid stupid stupid sequester
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goes into effect and people have to start standing in lines for three hours to get through security at the airports, they're going to visibly feel, you know, how this government has become completely dysfunctional. all right. so why do i think he's wrong? he's a good man, i have great respect for him, but my opinion lower spending and limited government is good medicine. by the way, these are tiny spending cuts in the grand scheme of things, you know what? house republicans are doing better than they think rejecting president obama's various stimulus plans. listen to this. actual spending restraint has dropped to budget share gdp of 25% at the peak in 2009 to 22.8% last year. all right. it's the right direction. the long-term trend is 19%. believe it or not, we are making some progress. so i'll say this. let's stop the cheap shot
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politics and crazy dire warnings. let's keep the taxpayer pressure on lower spending. i say implement the sequester. i believe it is pro-growth. that's just my take. let's bring in our distinguished panel. karen finney is a columnist for the hill. emily author of the new book "coolidge" and john mclake lynn. you know we're man is so wrong. you and you know that i'm right on this issue. police fess up. >> what i'm going to say, i disagree with the premise which is that the whole point of the sequester deal is because both sides were so childish when the president signed the budget control act, this was the only way for both sides to come together and say we're going to handcuff ourselves and major it really ugly so we have to actually get a deal done. that's the clip that the president was talking about. no easy off-ramp means sitting
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at the table and getting a deal done, but need side want that conversation. they're sayinged president already has his revenue and the president who has been consistent and i'm willing to do more spending cuts, but we have to have more revenue. >> this round is the spending cut round. the president -- >> he made clear. >> which would reallocate this money from the defense, but what the heck. emily, i think it's time for budget cutting, and you have done a fabulous biography of calvin coolidge. right now, right now, faced with obama's press conference, what would coolidge do? >> he would say sequester away. sequester me now. he served from '23 to '29. we just heard erskine bowles say we might reduce the increases. to coolidge a cut was a cut.
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when he left office the budget was actually lower than when he came in real terms, nominal terms with vanilla on top. >> did the economy grow or not? >> it grew strongly. 3% or 4%. unemployment was small. >> and the deficit, he paid down debt. >> he paid down debt. >> and he cut tax rates at the same time and he still paid down debt. >> he cut taxes. he had twin lion cubs. he actually named them tax reduction and the other one was budget bureau. can you imagine? >> i've already ahead the book twice. his portrayed i believe was hanging up in the cabinet room. >> yes, sir. >> when i was a young toddler working for him. john, you are a great pollster and strategist, are republicans right to hold the line or karen finney right? >> absolutely. last fall we asked a national survey shoo there be tax
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increases? two thirds of the voters 67% to 30 said before tax increases, get spending under control. spending is 3.8 trillion this year. the presidents -- you're talking -- you made the point they were dealing with 2% spending cuts. 40% out of whack. when is the day of reckoning coming? is he increased federal spending 25% without the revenue. >> but it has -- i want to make this case -- >> a little bit. not much. i'm going to give tweets that i should give him credit. i'm going to say the republicans insisted on -- i think they saved him from himself. we have a moderate recovery, but that's contributing. the ratio is coming down. i want it to get back to 19%.
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bill clinton, like the calvin coolidge. >> i think while it's bad for everybody, i think it's worse potential for the republicans. poll after poll, if you look at the full picture, it showed a majority of americans believe it's the republicans not willing to come to the table and make a deal, a. b, they like this concept of the balanced approach the president has been talking about. what are they hearing now as he head toward this magic day? the president saying let's try to make a deal, can we do something smaller? whether you agree with it, i'm saying the politics is the president seems to be in the position of trying to get a deal where the republicans are say we can't do everything. >> the president is trying to get a tax hide without any spending cuts. >> haz absolutely incorrect. he said he would do both. >> i have told by the majority leader the tax increases are real, the spending cuts aren't. he offered two bills that passed the house.
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>> all on domestic spending. >> you have to cut spending. >> all on domestic -- so you think there's no bloat in the military spending at all? >> there is. >> by the way, that's one of the reasons i favor this sequester. all i'm saying, as an old budget guy, what you do is opt mb hands out the new lower ceiling, lower spending, and you let the agencies choose. that's all i'm saying. that is the most efficient way to do that. but let mu ask you the economics question. when coolidge cut the budget, which he did relentlessly, how did the economy respond? >> the economy responded beautifully. so yes, larry, i agree with that. it's the essentially premise to sequester or cut the budget is dangerous to growth, that is wrong. the government doesn't need to drive the recovery. the private sector needs to drive it. >> that's the key point. let the private sector.
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>> so it's liberating. >> get rid of all that stuff. i'm all for that stuff, but the point is he put up all the uniform people behind him. god bless them. his stimulus package spend at least 1$150 billion to state an local government. now they're coming back for more. either they wasted it or didn't use it efficiently. at some point you have to take personal responsibility for these states and lot localities, john. >> you're talking about the stimulus -- >> that's not true. >> it is true. he took away work, karen. people now don't have to work and they're getting more money. hang on, stay with us. we're going to talk about a cut most americans support -- sal riggs, only this time for federal workers. all right? the news media also keeps says federal workers have been under a pay freeze, but that's not even close to the truth.
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we'll give you the real story in a few moments. it maybe by the heist of the century. get this. $50 million of diamonds stolen from an airport in brussels. it had to be an inside job. we'll talk to the world's top diamond expert how somebody could eveng go about selling that much merchandise. as i said before, don't forget, free market capitalism, not stealing diamond and nots spending taxpayer money is the best past to prosperity. i'm kudlow. we'll be right back. all stations come over to mission a for a final go.
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so we were talking about government gone wild. it's already estimated that federal workers earn up to 30% more than their private sector counterparts, but get this. the d pay freeze has been in effect for the past two years. on friday the house voted to extend it for another nine months. yet despite the so-called freeze, it seems that almost every federal worker has received a raise. what goes with that? whatever happened to paying for performance? james shirk is here, a senior -- waiting in the wings or panelist is with us.
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i don't get this. what happened? >> federal employees get a lot of different pay increases. there's a cost of living adjustment, but also virtually automatic seniority raises. he did not touch the senior-based raises. >> what happened to the seniority-based raises? >> they continue to get them. you virtually have to show up to work drunk in order not to qualify for the raises. unless there's exceptional misconduct. unlike the private factor, you can't get fired? >> it's almost impossible. you're more likely to die holding a federal job than you are for performance. left right and center, i think the range is 15% to 30%, federal workers total comp, salaries, benefits, pensions, 15% to 30% more. is that right? that's correct.
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some of the leading research is yes, they get paid more. no cost of living adjustments and no pay increases. what about that that they don't understand? >> 103 billion over ten years. that's something. >> that's fine. >> here's my issue with this conversation, though. i feel like federal workers, that is an easy cheap shot. it's an easy cheap shot. >> i love them. >> make them take the hit, they're lazy, they don't the work. you know what? we don't know -- >> i'm for the federal worker. >> me too. the american people got more than their money's worth for my little $19,000 --. i think it's a cheap shot. >> but i want to say, i don't mean it as a cheap shot, but i want government austerity right now i believe it as in shrinking the government, creates private
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sector prosperity. am i wrong about that? >> no, you're right. government austerity is different from private sector austerity. private sector austerity should be a choice. government austerity leaving room for the private sector to grow. that's the sort of knowledge that's gone from the current conversation. we forget that the government investment is generally less efficient, isn't it? less good? less productive than the private sector? maybe what the government does shouldn't be called investment at all, the president notwithstanding. only the private sector can really pick the right companies in the right way. what i look at coolidge is not that he hated the public sector or meant ill for the public sector workers. >> they're nice people. they raise families. >> it's so large that it hurts the rest of the economy. >> they do suck the air out of the private sector. that's all i'm saying.
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look, maybe down the road when this whole thing is over and the economy is more flush, they get back that are cost of living adjustments, or doesn't the public pin poll show that people really believe we should have federal, state and local austerity? >> i had to lay off friends action neighbors in state government in new york. it's a very tough thing, but it's real money. because that's where the salaries are, the pensions are. and so by raining that in, the republican leaders in the house, speaker boehner, majority leader cantor, are showing by example. instead the president wants to hire people, to hire i.r.s. agents to enforce obama-care. that part -- >> washington is not getting bigger. the size has gotten smaller under president obama. c'mon action that's an absolute fact. >> james, has the government
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gotten larger or smaller? i'm talking about the federal government, jim. >> federal payrolls outside of post office have gone up about 12% since the recession began. outside the post office, they're up about 10% to 12%. >> that's a big number. state and local government workers have shrunk, have they not? >> they have balanced budget requirements action so when the stimulus ran out, they've had to cut back, but the federal government, we're putting about 40% of the budget on the credit card. so no real economy there. >> thanks for reminding me. james, thank you very much. we appreciate it. now, 50 million in diamonds stolen in brussels. how about that? a braising robbery that looks like an inside job. what could be the heist of the century. that's next up on kudlow.
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diamonds. keirin simmons mass the detail. >> reporter: it was brazen escapes in millions in diamonds without firing a shot, leaving nothing but a burned-out van. the men were in two vehicles. they drove through a hole cut in the airport security fence and made straight for a brinks delivery plan. they filled the vehicles with boxes of gems, then fled back through the fence. it took just three minutes. now the diamond trade is left scratching their heads and wonders if this was some kind of inside job that the robbers knew the diamonds would be there. they've been taken from antwerp, the capital of the diamond trait. where ten years ago the biggest heist took place. once again they find themselves
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wondering how could it happen again? we'll have more on this height later in the show, talking to a diamond analyst. you've stolen $50 million in diamonds. can you sell them without getting caught? and why is the established maintreatment media all of a sudden up in arms about lack of access to the president? have they become his footstool? or is he the grand puppet master? we will debate this issue, because no one is really helpless.
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in the first term, president obama held press availabilities 107 times, which sounds like a lot, right? but compare that to the predecessor george w. bush who the media used to lamb past. bush held 345 availabilities during his first term. now the establishment is up in arms over the lack of access, calling obama the puppet master. have they become the president's footstool or maybe his lapdog?
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here is joel pollock, covering this story. karen and john are still with us. welcome back, joe. are they the footstool? why is the politico, which is the heart of the media establishment all of a sudden complains? what's going on here? the tipping point really came with cbs' 60-minute interview with barack obama and hillary clinton together. there was a lot to talk about, and steve croft did nothing to probe that at all, and you started to see in pushback within the media, saying this really juan unprofessional. you get access, and come there like a sup repp sup reply cant.
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>> this is the politico, this is the absolute -- they're all "the washington post" guys, for the most part, the heart of the media establishment in washington, d.c. they're two good guys, but they're saying they're at a disadvantage, joel. that's the victimization. they say the new technology, the social media are they right or just kepg because they're not doing their own home work? >> i think they're struggle to reconcile two things. the first is that obama is mistreating the media. the second is they like obama and want him to succeed. the media allows itself to be mistreated. he's able to walk all over and they keep coming back. you almost have to feedback to ed henry, complaining that obama
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didn't meet with the press. what was he complaining about? he didn't do photo ops at the golf course. it's hard to feel sorry for them, at the same time they're raising a valid concern, yet they don't know -- the obvious is you need to be more critical. >> be tough. >> are they victims? helpless? steve croft, good reporter i know him well, that was a horrible interview. there have been a lot of soft balls like that. what's going on? >> i have to tell you pretty much every press corps back as far as i can remember, they have complained. they said it was so much better until bush, and bush 42 comes in and they complain ailing it was so much better under clinton, and remember there were the same kind of stories under president bush, that he wasn't being pushed hard enough, so to -- >> the media in washington murdered bush.
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let me use this as an example. drone story. if the media found out that george w. bush was using drones to kill american citizens, even though there were enemy combatants, they would have gone berserk. i didn't hear hardly anything on this on the obama side. >> people like karen do a really good job. the interesting part is the american public knows it. last november, for the media research center, we asked is there a liberal media bias in 63% of all americans said yes. >> and why is the so-called liberal media complain just as much? >> because now he's cutting them off. he got reelected. he doesn't need them. >> to some degree this is the kind of whining. at the same time, the other thing that's changed from other administration that i think the media as an industry has to figure out, it is true in the
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white house, you can go around traditional media through twitter, through facebook, social media, and create your own content. that's going to be something regardless republican or democratic president you'll have to deal with, but joe, karen makes a very good point, it seems to me, that's going to be the future and it's not going to change. what blew my mind, the old media, apparently obama has not given as interview to any of the big print papers. nor has he given a pretty interview to the "wall street journal," so we're plus four years into it. that is unusual. is that going to be the new pattern, joel? is that going to be the new future? >> i think so. the obama operation continues outside the white house with his new 501 c 4 group, and they're generating their own social media, so they don't feel they need to go through traditional media to get to the american people. he's just going outside. that's fine, but what the media
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did under george bush. the complaint was that in order to get access, you had to tone down your cry sim, but they built up an entire critical dialogue about george bush among themselves when he wasn't paying attention. eventually he had to respond. the media is not doing that under obama. they're not critical, not skeptical. >> i have friends who were white house reporters during the bush years who told me they were told specifically from their higher-ups to watch their tone, because they were so afraid of getting cut off from white house access. >> some were so rude. >> wait a second. >> they were much tougher. c'mon. >> if they were so tough, how did we get lied to in the war. >> the biggest standard is the way he visited katrina and looked what happened with hurricane sandy in the northeast. >> there's no comparison. >> there is. there are people on staten island living in tents.
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>> and having the president would go there would not have made it easy. >> they're putting red tape around their houses. >> do you have any idea the impact of a presidential visit on the community? >> sure. >> i just don't think flying over and taking a look at it is the problem. >> they hammer president bush at katrina and have given this president a free ride. >> were you the dnc publication czarre czar ina? >> she's sitting right here appropriately to my left, joel. what advice would you give her? >> i think i would tell her to get ready for the coming fight within the democratic party, because i think it's going to get ugly. i think that many dids will be firmer opponents in many cases than republicans have been. the big fight will be over money action whether it goes to traditional groups and causes or sucked into the new 501 c 4. we're already seeing grumblings on there. i think there's pressure to
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deliver to the liberal base, but i think he has centrist interests. >> that is nothing in comparison to the fights that are going on on the republican side. we're all fighting. that that's the problem. >> joel, you're great. thanks for helping us. >> thank you. here's the big question. how do you handle $50 million worth of stolen diamonds without getting caught? my next guest is known as the world et cetera number one expert on diamonds. if anyone knows about this case, it's him. diamonds are forever, and we'll be right back. [ shapiro ] at legalzoom, you can take care of virtually all your important legal matters in just minutes.
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ally bank. your money needs an ally. has oats that can help lower cholesterol? and it tastes good? sure does! wow. it's the honey, it makes it taste so... well, would you look at the time... what's the rush? be happy. be healthy. dimes may be a girl's best friend, but in belgium authorities are searching for eight men carrying out one of the biggest heists in recent memory. my question is how do you get rid of $50 million worth of stolen gems without going caught? who better to ask that ian rappaport. he runs the rappaport report, which is the go-to list. karen finney, who loves
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diamonds, john mclack listck la would like to afford diamonds, where is -- these are run-cut diamonds. where in the heck will they be able to sell these diamonds? i've got to get rid of them. >> diamonds can be sold almost anywhere. they go from antwerp to dubai a lo the of them, and then to i haddia. big diamonds, of the kind these may have been, are very easy to transcript. if it's gold, you set off the metal detectors. money, people are watching cash. >> can you go through a metal detector. >> zero. it's an engagement ring. she's user girlfriend, your wife. >> completely unidentifiable? >> that's not true. interesting. we represent the gemological institute of belgium, so we handle billions a year for grading purposes. there was a robbery in belgium a
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few years ago. the diamonds we had were found, they threw them out the side of the road, because they had certificates, grading reports identifying the characteristics, which made them easily identifiable. they said we don't want this. the rough diamonds can go anywhere. >> typically where do you fence this stuff? do you go to russia? south africa? where do you go? >> you can pretty much go anywhere. wait your time. you probably cut them. once you take the rough diamond and cut it, now you're talking about an entirely different items. there are controls in the industry that control the flow of diamonds internationally, like passports them, called the kimberly process, but a lot of people avoid that. >> let's stay with that. if these criminals show up and they go to a reputable diamond cutter, let's say, start with the cutter. will the cutter know they're stolen goods? will they have a sixth sense? a seventh sense? >> the problem with the diamond
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instrument is a bit like with gales in the military, don't ask/don't tell. that's changing now. i think our industry is becoming much more responsible, but still in all, it's not that hard to find cutters who will cut them the diamonds. >> will a smart dealer with a lot of product rushing on, wait a minute, this could have come from the heist? >> $50 million, i hate to tell you, it's not much. >> like the federal budget. >> what can you get for $50 million? >> in terms of value, how many diamonds railroad wearing right now? >> i have no diamonds. i would be perfectly happy to have one. >> one tenth of a percent of the diamonds exported from -- or handled in antwerp. i know you're making a business hoo-ha about $50 million, but you're talking about billions of diamonds moving around the world continuously. mined in africa, cut in india mostly, sorted in belgium, sold
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in the united states. the understand imports $17 bill $21 billion worth of diamonds. >> it's impossible to track? >> if you wanted to take anything in the world that's worth a lot of money, and you didn't want to be traced, hey, rough diamonds, perfect. >> last one, this is kind of a dumb question. does anybody think about the terrorist aspect of it torrie? you got on this supposedly in antwerp, all the safety precautions, they got through the barriers, i mean, to me that's one of the scarier parts of this. >> what's freaking me out is thank god they weren't terrorists after the passengers. there were passengers in the plane. the issue of diamonds is very real. people think about the spin doctors and the president says that, but besides all the talk, there's real diamonds floating around the world in billions that people relate to. diamonds are a dose of reality when it comes to economic issues. when you're looking at the diamond market, you're looking
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at a very real place. is there a standard diamond that has a price on it? what's the price of a diamond? >> sure. we publish diamond prices nonstop. we were, about 5.2 billion listed every day. d-flaw his is about $27,000 a carat. >> how much? >> $27,000 a carat for a 1-carat stone, and then you could have one for $3,000, too, so you have a range. gold prices have exploded. have diamond prices exploded? >> no, not yet. we're creating a free market. the challenge for diamonds is to create transparency in prices and liquidity. >> but you're telling me diamonds are cheap. >> relative to other commodities in movement, diamonds are in fact cheap. what we'll see is more investment in diamond -- >> and more heists also? >> i guess so. i would say that diamonds are pretty cool, because that's what -- i should say they're hot. diamonds are hot. >> that's it.
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you're out. terrific stuff. up next, something else is hot. the stock market keeps making new highs. it's ignoring the spike in gasoline prices and just about any other negative. we're going to take a closer look at the bullish stock market. revolutionizing an industry can be a tough act to follow, but at xerox we've embraced a new role. working behind the scenes to provide companies with services... like helping hr departments manage benefits and pensions for over 11 million employees. reducing document costs by up to 30%...
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and processing $421 billion dollars in accounts payables each year. helping thousands of companies simplify how work gets done. how's that for an encore? with xerox, you're ready for real business.
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so from diamonds to stocks, the dow back over 14,000, up 54
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points today, nasdaq reached a 12-year high. s&p index up 11. meanwhile, health care stocks tumbled today in the government's proposed payments rates for medicare advantage really putting the screws to the hospitals. gasoline prices jumped 20% in recent months. they are the highest ever for this time, february, of the year. here now is ace brian kelly, the cofounder of shelter harbor capital, and karen finney and john mclackland are still with us. what's to worry? >> you mentioned it, gasoline. the real achilles' heel is any time of inflationary scare, something with gasoline, oil, that's kind of self-correcting in a sense, because prices go up, demand will decline. so, yes, there's easy money out there, but if inflation comes in, if gas is too high, if the input prices are too high --
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>> i want to bring our guests in, but let me asking a follow-up question. so far we haven't seen it. is it $4 a gallon, 4.50? let's say the national aaa, is there a dmz price beyond which the stock market craters? >> it's usually around $4 a gallon-ish. that's where it was in 2008 when it really started to impact on the stock market. so i would say that. as we get into the driving season it's also a function of disposal income. we thole that will be declines based on some of the tax increases coming in, but as a percentage of the disposable income, it could be 3.80, 3.90. how much do you see people ig noir angry at the hike of prices. on top of that, people are getting their tax refunds late
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this year. is that some kind of political witches' brew, that republicans can take advantage of? >> it can be, but the interesting part by us holding firm on spending cuts and against tax increases, we're actually the president's best friend. we certainly helped him to get reelected when he extended the bush tax cuts for a couple years, but the thing here is the tough part is we know things like the keystony popline. last year our polls 72% supported it. it makes great sense to produce north american energy, and we're hearing we can become self-sufficient, but it's not happening. you talk about king dollar being weak. oil is valued in dollars. the price of gas goes up, and the politicians don't control it. food is going up, gas is going up, health care bills are going up. there's a real bad economic prediction. if we don't have economic growth, they have tax increases -- it's bad.
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>> when's your man going to passkeystone? hundreds of blue-car workers are getting angrier. >> only the shadow knows. who knows when that will happen. the problem with gas prices is a political issue, whether you're a republican or democrat. it's the most accuse thing that hits people's pocketbooks the faster. the problem, as i understand it, is there's a transition to -- costs will go down. >> there's a lot of refines problems. boutique refining -- >> but it's the pinch right now that's definitely on top of a number of other factors. >> i think it's phony baloney. it is a real issue as long as prices are going up. >> it's a real issue if you have to work an eight-hour shift to fill your tank. >> it's also an issue of getting the oils to the refineries. there's tons of oil in canada, but they would rather ship it to
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china, but they can't get it to our refineries. >> that's cheaper than the west texas crude. if they could get them to the refineries in the gulf cost and the rest of the pipe system would get them to the east and coast coast, but it's all bess stopped by this controversy. no one wants to move. >> who wants to convince the governors of those states that it's a good idea. >> i had the governor from nebraska, he said he's fine with it, they're waiting for obama. so how come stocks are so great? >> people are under the assumption that the central banks will always be there. we get into this self-reinforcing concept that they're the only ones going up, and you have to build. eventually it collapses, but for now it's going up. you've had considerable wealth creation, even more than
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most, what does that do to the political situations? i don't really see that in the polls. >> i think it helped the president over the last year. you had the market going up, people recapture 401(k)s, it hasn't happened in real estate as much. when you think of the american average household, it's their home and whatever they have for the retirement. you can see the president's trend lines going up. the bad part is it's not going the other way. >> i would say from the autumn of 2011, which is a bench-day-old mark, stock prices went up hugely, i think, close to 35, 40%. housing prices started rising. and the unemployment rate started falling inside. and i remember a lot of people, i had jack welch on this show, very distinguished man president i love the guy, but he was always saying it was the bureau crass that were fixing the numbers. i think the combination, better stock prices, and improving housing, really helped reelect
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barack obama. i just doivities are you saying the president did something right then? i'm just saying -- it sure seems like it. >> ben bernanke game him liquidity, but it doesn't matter. the point of that is whoever is president, look, reagan would take -- anybody in their right mind would take credit for a booming stock market. >> of course, everybody feels about it. the why wouldn't you want to take credit for it. whether you did it or not. >> great point. 100% right. is there a large group of investors worried about these budget guts and so-called sequester? >> i would say everybody is worried about it, but nobody seems to be acting on it. everybody is concerned that the sequester is going to come in, you're going to have tremendous gdp drag coming in. us the payroll tax cut, but
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nobody seems to be acting on it. until the market cares about it, it doesn't care. >> i think the biggest drag would be the tax increase. that's what the market would react to. you know, the other part is what happens when the federal reserve stops buys our debt. you know that, larry. what happens when the federal reserve -- it's like a ponzi scheme. >> well, they can't. that's the problem. you can't start pulling back liquidity any time soon. the federal reserve has to convince us all that they're a bit reckless, because then we'll be go spending our dollars. >> seriousry, seriously -- >> it's a while off. i i realize that. >> i think the stock market really helped president obama. anyway, brian kelly, you're terrific. karen finney, great stuff. john, all joins us for the entire hour. i really am grateful. that's it for this evening as show. thanks for watching. diamonds are a girl's best friend, even if they're heisted. i'm kudlow. we'll see you tomorrow night.
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The Kudlow Report
CNBC February 19, 2013 7:00pm-8:00pm EST

News/Business. Larry Kudlow. Larry Kudlow provides his unique perspective on business, politics and investing. New.

TOPIC FREQUENCY Us 9, Obama 5, Karen Finney 5, Washington 4, Karen 4, Belgium 4, Joel 3, Unitedhealthcare 3, Kudlow 3, Geico 2, Brian Kelly 2, S&p 2, George W. Bush 2, Hilton 2, Barack Obama 2, Spiriva 2, Ford 2, Steve Croft 2, America 2, Kansas City 2
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